Loss of inhibitory circuits in the spinal cord dorsal horn is one of the major contributors to persistent pain following nerve injury (neuropathic pain). The loss of inhibition contributes not only to the development of spontaneous pain, but also to the hyperexcitability that underlies the allodynia and hyperalgesia that are characteristic of thes clinical conditions. Pharmacological management of nerve injury-induced neuropathic pain is directed at enhancing inhibitory controls, but unfortunately, not all patients are responsive to such therapies. Furthermore, adverse side effects, which arise because treatments typically involve systemic drug administration, often limit the use of effective doses. We propose to develop a novel therapeutic approach (transplantation of precursor inhibitory neurons) that is designed to restore the inhibitory controls in the spinal cord. The treatment regime differs from traditional pharmacological therapies that are directed at symptom management; transplantation to replace missing interneuronal control is a disease modifying approach. Transplantation of embryonic precursor cells has, in fact, resulted in functional improvement in various neurodegenerative diseases, but still very little is known about the underlying therapeutic mechanisms and the extent to which connectivity exists between grafted cells and host tissue. We propose to transplant cells derived from the mouse embryonic medial ganglionic eminence (MGE). In Specific Aim 1, we will continue our analysis of the circuits in which the transplants participate and will use electrophysiology to assess the extent to which inhibitory controls derive from the transplants. In Specific Aim 2, we will assess the ability of the transplants to alleviate the persistent pain produced by peripheral nerve injury, including those produced by chemotherapeutic agents. Using selective antagonists to counter the effects of the transplants, we will determine whether GABA is indeed the major contributor to recovery. Finally, in Specific Aim 3, we will use a novel chemical-genetic approach to achieve in vivo spatio-temporal control of the activity of the transplants. These studies will establish that MGE-derived cells have the essential properties for a cell-based therapy, particularly when loss of inhibitory control is a major contributor to the clinical condition. Success in this endeavor will establish the proof of concept necessary for eventual studies of cell transplantation for persistent pain in humans.